Creating an Effective Budget

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Creating An Effective Budget

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The best wayto acquire financial security

is to have a sound budget.


Creating Your Budget: Getting Started

• The backbone for your budget is how much money you make.

• Use your net income, not gross.• Consider your tax refund as a bonus!


Figuring Your Income

Include income from:• Your jobs• Businesses you own• Investments• Alimony or child support payments• Residual income, like rents or royalties• Any other source of income


Does Your Paycheck Vary?

Determine your average monthly income:

Total income from past 3-6 months

Number of paychecks during that time

Income Estimate


Figuring Your Expenses

Your expenses include:• Fixed• Variable• Non-Essential


What Are Fixed Expenses?

? ? ?


Fixed Expenses

Payments that are the same every month:• House/rent payments • Car payments• Cable payments• Loan payments• And more


What Are Variable Expenses?

? ? ?


Variable Charges

Payments that change each month:• Groceries• Gasoline• Entertainment• And more

Tip: Use an average amount of each variable charge for

your budget!


What Are Non-Essential Expenses?

? ? ?


Non-Essential Expenses

Things that we want, but don’t necessarily need:• Excessive amounts of clothing and shoes• Eating out• “Stuff” you buy only because it’s on sale


Self-Reflection Questions:

• How much do I spend every month?• What are my variable charges? Can I reduce

these?• How much do I need to make in order to get by?


Action Tips:

• Write down your income and expenses.• Estimate your variable expenses.• Cut down variable expenses in order to…

Earn More Than You Spend!

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Creating an Effective Budget